AMD Stock Q1 Earnings Preview: Tariff Risks and AI Market Share Concerns

AMD Q1 earnings preview: Susquehanna analyst Christopher Rolland expects in-line to slightly better results due to tariff-related pull-in in PCs, but notes weaker guidance due to US export restrictions impacting MI308 sales in China. He forecasts MI300 revenue of $6 billion and total revenue of $30.75 billion for 2025, down $1.25 billion from his previous estimate. Rolland maintains a Positive rating and price target of $135, implying a 40% gain in the months ahead.

Susquehanna analyst Christopher Rolland has issued an earnings preview for Advanced Micro Devices Inc (AMD, Financial), expecting in-line to slightly better results for the first quarter of 2025. Rolland attributes this outlook to tariff-related pull-in in the PC market, but notes a potential weakness in guidance due to US export restrictions impacting the MI308 sales in China. Despite these challenges, Rolland maintains a Positive rating and a price target of $135, implying a 40% gain in the months ahead [1].

Rolland forecasts MI300 revenue of $6 billion and total revenue of $30.75 billion for 2025, a $1.25 billion decrease from his previous estimate. The analyst highlights that while the PC market is expected to benefit from tariff-related pull-in, the export restrictions on AI chips could lead to a weaker performance in China. This could impact AMD's overall revenue and earnings, particularly in the high-performance computing segment [1].

The export restrictions are part of broader geopolitical tensions centered around technology and intellectual property. The U.S. government's move to control the advanced technology flow to China is set to have significant global implications, potentially reshaping the international semiconductor market. Experts suggest these restrictions could inadvertently bolster Chinese tech giant Huawei's position in the global chip-making arena [2].

AMD's stock has been impacted by these geopolitical tensions, with analysts forecasting an average target price of $141.22, a 61.39% upside from the current price of $87.50. The consensus recommendation from 50 brokerage firms is currently 2.3, indicating an "Outperform" status. GuruFocus estimates the GF Value for AMD in one year to be $162.89, suggesting an 86.16% upside from the current price [1].

As AMD navigates these challenges, investors should closely monitor the progression and impact of any new tariff policies on product costs and supplier negotiations. The ability to manage SG&A and maintain operating margins amid cost pressures, as well as execution of new store openings and supply chain investments, will be key indicators of future performance. The company's ability to adapt to these external risks and maintain its competitive position will be crucial for its long-term success.

References:
[1] https://www.gurufocus.com/news/2789943/nvidia-nvda-faces-export-restrictions-impacting-ai-chip-sales-to-china-amd-stock-news
[2] https://finance.yahoo.com/news/orly-q1-earnings-call-margins-220004435.html